By Paul R. La Monica

The growing backlash to Elon Musk is having a clear impact on Tesla, the electric-car maker that he heads up as CEO. The stock is the S&P 500's second-worst performer, down more than 40% this year.

But investors who own funds betting against Tesla must be delighted by all the time Musk is spending in Washington in his new side gig as head of President Donald Trump's budget-cutting DOGE.

A small number of so-called inverse single-stock exchange-traded funds are essentially ways to short Tesla stock, profiting from its massive decline. The Direxion Daily TSLA Bear 1X Shares ETF, for example, is up nearly 60% since the start of January.

Other funds that use derivatives to amplify their short bets against Tesla have fared even better. The Tradr 2X Short TSLA Daily ETF, T-Rex 2X Inverse Tesla Daily Target ETF and GraniteShares 2x Short TSLA Daily ETF have each surged more than 120%.

On the flip side, there are also several ETFs that offer heightened long exposure to Tesla. They have, unsurprisingly, fallen even harder than the common stock. The GraniteShares 2x Long TSLA Daily ETF, Direxion Daily TSLA Bull 2X Shares ETF and Leverage Shares 2X Long TSLA Daily ETF have all plunged around 70%.

None of these ETFs are for the faint of heart. Volatility is a feature, not a bug, for the leveraged funds.

And the reason is simple: time -- the long and short of it.

Tesla stock has been hit hard this year because of worries about declining sales and DOGE boycotts, but it's still up more than 35% over the past 12 months. In the same time frame, the leveraged short ETFs are all down about 75%.

Those numbers are exactly why this type of ETF is really for traders looking to make a quick buck or use as a hedge. They're not for the classic buy-and-hold investor.

Risks aside, single-stock leveraged ETFs are popular with investors who want more ways to enhance their bets on -- or against -- high-profile stocks.

Out there right now are leveraged ETFs for Nvidia, Super Micro Computer, Coinbase, and Palantir. And those are just a few of the big names.

There is even a new ETF from Defiance that lets investors make a leveraged long bet on Tesla and against Ford. With Ford up slightly this year and Tesla way down, it's no surprise that the Battleshares TSLA vs F ETF -- the ticker symbol of ELON -- is down 64% since its February launch.

That kind of a loss makes you wonder whether it makes more sense to flip the script: Go long on Ford and short Tesla.

Despite ELON's rocky start, Defiance promises to launch more Battleshares ETFs that would pit "disruptors against legacy giants in key industries."

Nvidia vs. Intel, perhaps? Netflix vs. Disney? Ford vs. Ferrari? Wait. They're both legacy giants. Great movie, though.

Write to Paul R. La Monica at paul.lamonica@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

March 20, 2025 14:09 ET (18:09 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.